The Canadian dollar (CAD) sees no major events on the horizon this week and trade on Monday has shown that there are still buyers interested in picking up the currency.

Monday saw the Canadian dollar firm up and Tuesday appears to indicate more of the same is on the cards. A look at the exchange rate complex on Tuesday shows:

The pound sterling to C$ rate is: 0.03 pct higher that at last night's close at 1.8476, but this is still lower than our Monday morning quote.The euro to C$ rate is: 0.05 pct higher at 1.5500.The US dollar to C$ exchange rate is: 0.06 pct higher at 1.1201, lower than at 1.1213 quoted 24 hours earlier.PS: These are mid-market rates; your bank will affix a spread at their discretion. However, an independent FX provider will guarantee to undercut your bank and bring you a rate closer to the market rate. Please learn more here.

Canadian dollar vs pound sterling forecast

The effect of impressive Canada inflation and retail sales data proved to be short lived and the pound has rebounded driving the rate higher. Governing Council Member Lane will speak this afternoon (16:30), and may shed light on the bank’s stance after the last inflation release.

"With little to drive the rate in either direction, we suspect sterling will remain on the front foot with levels around 1.8530 most likely today," says Sasha Nugent at CaxtonFX.

USD vs Loonie; USD to be well supported

Keep an eye on the USD vs CAD for guidance on the GBP-CAD as big moves here could impact the smaller cross.

According to a note just issued by TD Securities, we are unlikely to see major interest for the loony which should support the USD-CAD and GBP-CAD:

"With no Canada data out for a week—nothing at all, that is—the CAD will be a slave to the flows and external developments.

"We think the low domestic inflation/sluggish growth outlook for Canada will continue to contrast somewhat at least with the improving underlying fundamentals in the USD and keep a firm bid under USDCAD. Having found solid support in the upper 1.11s, more or less right where we thought the market would base on Friday, we look for gains towards the mid 1.13 area from here."

Also commenting on the forecast for the Canadian dollar today is Stephen Gallo at BMO Capital:

"The modest short covering rally in the CAD post-data on Friday is not particularly noticeable on the daily chart, especially since USDCAD managed to close [slightly] within the upper-end of its range, above 1.1215.

"Moreover, price action in the pair this morning did not appear to be indicating fatigue in terms of topside, especially with decent support tending to show up at or around the London lows (1.123).

"We think the short-term market remains modestly net short of CAD at around 1.123. However, with key nominal rate differentials keeping the pair well supported at this stage, the level of discomfort with that short CAD position is probably quite low.

"We look for the key US data between today and Friday to guide the pair, with 1.1278-1.130 and 1.1175-1.120 acting as the first important layers of resistance and support."